The Economy's Perilous Waters

What a difference a week makes. With their coordinated response to the international banking crisis, European governments  followed by the U.S.  appear to have calmed a worldwide market panic and eased fears of a devastating series of bank collapses. Investors from Tokyo to Tunis immediately sent stock prices shooting up again after a week of historic losses. But it's still far too early to celebrate. The measures need to prove their effectiveness by unfreezing lending. And there's still the huge challenge  no less urgent than fixing the banking system  of preventing an economic...